A public register revealing the ultimate owners of overseas legal entities buying property in the UK will be launched in early 2021, the UK Government has announced.
The beneficial ownership register is part of the Government's plan to achieve greater transparency around non-UK companies purchasing UK property or participating in UK Government procurement. It follows the introduction last year of a similar UK register which requires most UK companies to provide details of persons with significant control over them. The government asserts that the introduction of the overseas register will make it easier for enforcement agencies to track criminal funds and will serve to inhibit corruption within the UK property market. Recent figures suggest that, since 2004, over £180 million worth of UK property has been placed under criminal investigation - 75% of which is linked to corporate off-shore secrecy.
The proposals, if they are brought into force, will likely have a significant administrative impact on foreign entities holding UK property, with current debates in the House of Lords indicating that non-compliance may result in both criminal sanctions, as well as restrictions being placed on the future disposal of the property held. Importantly, the UK Government will need to ensure that, by introducing the register, it does not place too great a burden on non-UK entities so as to discourage investment.
The government has committed to publishing a draft bill this summer, and introducing it in Parliament by summer 2019. We will provide further updates in due course.
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